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Sunday, March 26, 2023

Disaster Relief and Administrative Convenience

Severe storms have been ongoing in many parts of California since December. I have two family members with severe damage to their homes causing them to have to move out for repairs. And I know many others also suffered significant damage to property.

FEMA and the IRS responded with relief. The IRS has now issued three announcements of which of the 58 counties in California get a postponement of filing and payment and for what periods - generally, if eligible based on county of residence, filing and payment (such as for 2022 returns) is now October 16, 2023.

Each of the three announcements lists mostly the same counties, but the lists are not identical nor the start date. But after these three casualty relief notices, just three of 58 counties in California don't get filing and payment relief - unless their records are in a county that gets relief and they ask the IRS for the postponed filing and payment date.

Well, California has a population of 39.2 million. The population of the three counties not included in relief are:

  Lassen - population 31,000

  Modoc - population 8,700

  Shasta - population 181,000

These counties represent less than 1% of California's population.

Some of the individuals and businesses in these counties may have activities or tax assistance in a covered county so will need to call the IRS to get the filing and payment postponement relief. 

But, given the small number of people and probably small number of businesses in these three counties, why not just extend relief to all of California? That should make it easier for the programming adjustment for IRS computers regarding California filers, and eliminate the need for anyone in these counties to have to ask the IRS for relief because records are in an affected county.

I think that adjustment would fall under administrative convenience. Too bad there isn't a good data analytics tool that could have quickly highlighted to the IRS that their relief notices were covering about 99.5% of California - so why not cover it all.

Another point is that while many had damage, I suspect most people did not. The payment extension for 39 million individuals and hundreds of thousands of businesses, even if 60% of individuals are getting refunds rather than making payments of 2022 taxes, will likely have a noticeable affect on tax coffers. Why not include a note in the relief messages that the government encourages everyone to pay on the regular due date if possible to avoid the need for the government to cover the shortfall for a few months.

What do you think?


daryl petrick said...

100% in agreement, Annette. I've sent it to my clients in Redding who owe tax and they are addressing it with their representatives on behalf of the entire region. said...

Back when Kamala was working in the state government they told me they still owed me some money from a former employer. When I responded with my ID and verification, they told me they were so backed up in the office that it might take over a year to deal with the request, and in that case, it meant that they were still busy. I kid you not.